The company had 100,000 shares of common stock outstanding on January 1. In addition, as of January 1, the company had issued 10,000 convertible preferred shares (cumulative, 5%, $100 par). These preferred shares were converted on September 1. Each preferred share was converted into four shares of common stock. The preferred dividends for the entire year were paid in full before the conversion. The company has no other potentially dilutive securities. Net income for the year was $200,000. Compute
(1) Basic earnings per share and
(2) Diluted earnings per share.